IFC to raise USD 2.5 billion from onshore rupee bonds

New Delhi: IFC, World Bank's financing arm for the private sector, on Wednesday said it would raise USD 2.5 billion (about Rs 15,000 crore) from rupee-denominated bonds to support infrastructure development in India.

IFC will use a combination of rupee-denominated bonds and swaps to raise local-currency financing of up to Rs 15,000 crore over the next five years, IFC Executive Vice President and CEO Jin-Yong Cai said here.

Speaking at the launch of the programme, Economic Affairs Secretary Arvind Mayaram said, "It will also create a new momentum in the development of corporate bond market and long term bond market. It will create a yield curve which can then be followed by others."

He said the onshore bond programme marks another important milestone in the engagement between India and the International Finance Corporation.

Finance Minister Arun Jaitley, recently announced long-term bonds to be raised by banks to fund infrastructure.

"All of these together would provide lot of liquidity in an areas where liquidity has been a problem," Mayaram said.

He said it would help in developing pipeline of projects and give confidence to private sector.

Cai said that vibrant capital markets provide critical access to finance for the private sector.

Under the programme, IFC offered six separate issuances between November 2013 and April 2014; four with maturities of three years, one of five years, and the final tranche of seven years.

In 2013-14, IFC invested USD 1.2 billion in 34 projects in India to achieve strategic priorities of providing counter cyclical support to infrastructure, promoting financial inclusion and enhancing access to quality and affordable healthcare to the under-served.